How SMT Assembly Is Priced: The Placement Point and the Setup

The question of what an assembly costs is often answered with a single number per placement placement point, and that number is real but it is only part of the price. An order also carries a setup cost, a stencil, a programme, a first article and, where it is required, a fixture. The placement points are what vary with the quantity, and the setup is what does not. Understanding which part of the quotation is which is what allows a customer to make sensible decisions about quantity, design and timing rather than negotiating against a number that was never the whole of the price.

The Price per Point and What It Includes

A placement point is a component position, and the price per point covers the machine time to place it, the inspection that follows and a share of the operating cost of the line. The figure varies with the package, because a small passive component is placed quickly while a fine pitch device requires a slower approach, a longer vision operation and possibly a check that the passive does not need.

The number of points on a board is therefore not the only input. A board with two hundred small passive components is cheaper per point than a board with the same number of fine pitch devices and connectors, and a board that mixes many package types costs more per point than one that repeats a few, because every change of nozzle and every change of vision setting costs time.

The double sided assembly is the other variable that catches customers out. A board populated on both sides is two passes through the line, which means two prints, two placements and two reflows, and the second pass also has to protect the components already attached to the first side. Where the second side carries few components, the cost per point is high because the pass is not shared with many placements.

The Costs That Do Not Scale

The stencil cost is incurred once per product and per revision, and it is a real cost because a stencil is a precision article. The design of the aperture, the foil thickness and the frame are all specified for the product, and a stencil that has been designed badly produces a defect rate that no other part of the process can recover. A revision of the artwork usually requires a new stencil, which is one reason why a design change after the first order is more expensive than the same change before it.

The programme and the first article follow the same pattern. The coordinate file has to be adapted to the machine, the placement programme has to be built and verified, the reflow profile has to be measured and the first article has to be inspected and confirmed. None of those costs repeats if the product is built again to the same revision, which is why a repeat order is cheaper than the first order for the same quantity.

The fixture and the test programme are a third category where the order includes testing. A bed of nails fixture is a designed and manufactured item, and its cost has to be recovered from the order or amortised across the programme. A product that is likely to be built repeatedly amortises well; a one-off prototype does not, and the cost of the fixture may exceed the cost of the boards.

Why the Unit Price Falls With Quantity

The reason the price per unit falls as the quantity rises is not a discount. It is the arithmetic of dividing a fixed cost among more units, and it explains the shape of the curve. At small quantities the setup dominates, and doubling the order nearly halves the unit price. At large quantities the setup has become negligible and the price approaches the sum of the material and the placement cost, where further increases produce a much smaller change.

The practical consequence is that the quantity decision matters much more than the negotiation on a small order. A customer who needs a hundred boards and expects to need another hundred within a few months will frequently be better served by placing two hundred and holding the surplus than by placing two orders, because the second order carries a second setup in addition to its own material.

The same reasoning applies to variants. Where a product exists in several versions that differ by a small number of components, building them together amortises one setup across the whole family, and building them as separate orders pays for the setup several times.

What the Customer Can Control

The design decides a large part of the assembly cost before the quotation exists. The number of package types, the placement of the components on one side or two, the panel arrangement and the tolerance of the design against the process all move the price, and all of them are cheaper to change while the artwork is open than after the first order has been placed.

The information the customer supplies decides another part. A complete bill of materials, an accurate coordinate file, a clear assembly drawing and a defined test requirement remove the uncertainty that otherwise has to be priced as risk. Where the data is incomplete, the quotation carries a contingency that the customer pays for whether or not the risk materialises.

The schedule is the third. An order that can be placed in a quiet period is easier to fit into the production plan than one that has to be delivered during a peak, and a customer who can be flexible about the delivery date is a customer the planner can accommodate. Our SMT assembly and turnkey PCB assembly services quote from the data, the material side is handled by component procurement, the small quantities run through low volume PCB assembly and the volume programmes through high volume PCB assembly.

Comparing Two Quotations Properly

Quotations for the same product can differ by a wide margin without either of them being unreasonable, because they may not include the same work. The first question to ask is what the placement price covers: whether the solder paste and the stencil are included, whether the inspection stages are included and whether the packaging and the documentation are included.

The second question is what happens when something goes wrong. A quotation that assumes a straightforward build is cheaper than one that includes a contingency for the problems the product is likely to produce, and the difference only becomes visible when the first batch runs. A product with a fine pitch device, a bottom terminated package or a demanding cleanliness requirement carries a different risk from a board of ordinary passives, and a supplier who has reviewed the data will price it accordingly.

The third question is the quantity basis. A price quoted for a sample quantity and a price quoted for production are answers to different questions, and comparing them produces a misleading conclusion in either direction. The useful comparison is at the quantity the customer actually intends to order, with the same scope stated for each supplier.

Where the Price Is Decided

Most of the cost of an assembly is committed before the quotation is requested. The number of components, the packages, the number of sides populated, the panel arrangement and the test requirement are all design decisions, and the quotation is largely an arithmetic consequence of them. A customer who wants to reduce the assembly cost has more influence over it at the layout stage than at the negotiation stage.

This is why the manufacturability review is worth holding early. A design that uses a smaller number of package types, places its components on one side where the board allows, and leaves room for the panel to be handled is cheaper to build for reasons that have nothing to do with the price per point. Those savings are structural rather than negotiated, and they apply to every unit the product will ever be built in.

FAQ

What is a placement point? One component position. The price per point covers the placement and the inspection and varies with the package being placed.

Why is the second side more expensive per component? Because it is a separate pass through the line, so its cost is shared among fewer placements.

What makes a repeat order cheaper? The stencil, the programme, the profile and the first article already exist, so only the material and the placement are paid for again.